On any given day you can read an explanation for financial events which is plausible but basically just pure fantasy. The business section of the news will tell you that "the Australian dollar rose due to an increased risk appetite of investors" or "the Australian dollar fell due to concerns of investors over Europe". The explanations are all made up, and based on nothing more than somebody's attempt to explain that which cannot be adequately explained.

However, some things remain clear. If you believe that the US economy is a stinker, and on the ropes, and that the Australian economy is in great shape, yet the Australian dollar is worth approximately one US dollar, what does that really say about Australia.

There was a fellow who argued that if you didn't know anything about economics and had to reason everything out from scratch, you would assume that countries with a lot of resources would be wealthy. But he claims, almost always you find that they are not. He then argues that the reason why they are not wealthy is because those who run them don't need to set up an economy with any complexity because they can just wait for the money to roll in from sales of the resources, and that usually they are run by dictators who don't have to worry about complaints from the beneficiaries of their policies.

Although Australia doesn't really fit his model, the explanation is somewhat interesting, viewed in the context of this country. We have resources so we don't need manufacturing industry, because we can just sell the resources. Which is fine. Though it is rather inconvenient when resources are not wanted. As in global recessions.

So unless it is intended that the medium and long term future of this country is for it to have its economy fall sharply in response to every recession in the northern hemisphere, something has to be done to change the dependency on resources alone. In some ways the northern hemisphere people have been doing a somewhat poor job of things so why not try a new paradigm.